DOE announces $13bn to upgrade and expand US electricity grid

Funded by the President’s Bipartisan Infrastructure Law, the Transmission Facilitation Programme (TFP) has been allocated $2.5 billion while the Grid Resilience Innovative Partnership (GRIP) programme is receiving $10.5 billion, which will be split across three initiatives.

Combined, it represents the largest single direct federal investment in critical transmission and distribution infrastructure and one of the first down payments on an over $20 billion investment under the Biden administration’s Building a Better Grid Initiative, the DOE said.

Both the TFP and GRIP programmes are now open to applications for funding.

“With nearly 70% of the nation’s grid more than 25 years old, the President’s agenda is making historic investments that will strengthen the nation’s transmission grid to drive down energy costs, generate good-paying jobs, and help keep the lights on during extreme weather events,” said US secretary of energy Jennifer M. Granholm.

The federal investments, which were announced on 18 November 2022, will “unlock billions of dollars of state and private sector capital” to build transformative projects that increase the reliability of the power grid and modernise it. This will mean “more American communities and businesses have access to affordable, reliable, clean electricity – helping deliver on the President’s goal of 100% clean electricity by 2035”, the DOE statement added.

Large-scale transmission help

The $2.5 billion for the TFP “establishes an innovative revolving fund” to help overcome the financial hurdles facing large-scale new transmission lines, upgrades of existing transmission lines, and, in select states and territories, the establishment of micro-grids, the DOE said.

The TFP hopes to help applicants with “an innovative approach that can spur valuable new lines that otherwise would not get built or increase the capacity of already planned lines”.

Under the first solicitation, released last Friday, DOE will use capacity contracts to commit to purchasing up to 50% of the maximum capacity of the transmission line for up to 40 years and then sell the contract to recover costs, thereby becoming an “anchor customer” for projects, it said.

By initially offering capacity contracts to late-stage projects, DOE will increase the confidence of additional investors and customers and “reduce the risk of project developers under-building or under-sizing needed transmission capacity projects”. The submission deadline for the first ‘screening’ phase of the application process is 1 February 2023.

GRIP initiatives

The $10.5 billion allocated to the GRIP programme will be split across three initiatives, with the first $3.8 billion round of funding now open for fiscal years 2022 and 2023.

Of the full funding package, $2.5 billion is for grid resilience, as well as industry grants for electric grid operators, storage operators and generators to fund transmission and technology solutions to mitigate against multiple hazards in regions and communities.

Hazards include extreme weather or related events such as wildfires, floods and hurricanes, or any event that can cause disruption to power systems.

Applicants for the first round of funding under this initiative have until 16 December 2022 to submit concept papers.

Meanwhile, $3bn is for smart grid grants to increase flexibility, efficiency, reliability and resilience of the electricity network, with a particular focus on increasing transmission capacity and integrating renewables and facilitating the increasing number of electric vehicles.

Applicants for first round funding also have until 16 December to submit their proposals.

Grants are targeted at domestic institutions, including state and local government entities, tribal nations, higher education facilities and for and non-profit organisations

The remaining $5 billion of the GRIP funding will be for its grid innovation programme.

It will be used to provide financial assistance to one or multiple states, tribes, local governments, and public utility commissions. These groups will collaborate with electricity grid owners and operators to deploy projects that use innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability.

The deadline to apply for first round funding is 13 January 2023.

Bottleneck looms

Independent estimates indicate that the US needs to expand electricity transmission systems by 60% by 2030. It may need to triple current capacity by 2050 to accommodate the country’s rapidly increasing supply of cheaper, cleaner energy and meet increasing power demand for electric vehicles, electric home heating as well as to reduce power outages from severe weather, the DOE noted.